Quixtar
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Quixtar is a multi-level marketing company, founded in 1999 by the owners of Amway. Quixtar is owned by Alticor which also owns Amway. Quixtar took over the Amway business operations in the United States, Canada and the Caribbean between 1999 and 2001, replacing Amway as the marketing venture for products such as Nutrilite vitamins, XS Energy drinks and Artistry cosmetics in those North American regions.
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Business
People can join Quixtar as "Clients," "Members" or "Independent Business Owners" (IBOs). IBOs pay a registration fee and build their businesses through retail sales (to clients and members) and by helping other IBOs build similar businesses. Their earnings are based on sales and the volume of sales and purchases of other IBOs recruited below them. The primary way to join and buy products at Quixtar's web site is with a referral number from an IBO. Quixtar sales for fiscal year 2003-2004 were over $1.1 billion with over $373 million paid out in bonuses and incentives.
Quixtar offers a wide range of products for its IBOs to purchase and sell through the Quixtar.com website.
Quixtar currently sells one of the leading vitamin/suplement lines in the world - Nutrilite (http://www.nutrilite.com), a top five prestige cosemetic line - Artistry (http://www.artistry.com) (*Euromonitor Global Sales Survey 2001. Others in this distinguished group include: Clinique, Lancome, Estee Lauder and Sofina) and the 2nd largest selling energy drink in America - XS Energy Drink (http://xsgear.com) (see bevnet.com (http://bevnet.com/news/spotlight/xs/default.asp))
Controversy
However, Quixtar and its predecessor Amway, have been controversial for years because of allegations that these companies are pyramid schemes. Critics claim that most of the products sold by Quixtar are to its network of IBOs for personal consumption rather than to retail customers. Because there is no mechanism in place to distinguish personal consumption from retail sales many IBOs practice the "buy from yourself and teach others to do the same" method of multi-level marketing.
The business skills of IBOs are honed by business support material and tools sold or provided by select distributors within the higher ranks of the organization. It is claimed that the support material can be of help to an IBO if he wants to build a big business, however undercover investigations (like one done by MSNBC Dateline (http://www.msnbc.msn.com/id/4375477/) in 2003-04) suggest that most the money being earned by these distributors was coming from the hidden "tools" business rather than through selling the products of Quixtar.
In the summer of 2004 Quixtar launched a sophisticated Web initiative designed to manipulate search results. The "Web Reputation Task Force" (http://www.webraw.com/quixtar/archives/2004/10/the_quixtar_web_initiative.php) tried to influence search engines in such a way that links to sites critical of the Quixtar business would be replaced by links to sites Quixtar controlled. The Task Force's primary tactic was a form of Google bombing that vigorously exploited blogs (http://www.webraw.com/quixtar/archives/2005/01/so_busted.php).
Litigation
In a 1979 ruling, the Federal Trade Commission determined that Amway was not an illegal pyramid scheme because it enforced rules requiring distributors to sell to at least 10 retail customers per month and to sell 70% of the products to customers. Critics state that Quixtar does not enforce the retail sales rules. Quixtar maintains that the 70% rule is only meant to prevent product stockpiling to achieve certain bonuses.
External links
- Quixtar (http://www.quixtar.com/)
- Archive of Quixtar information (http://www.amquix.info/)
- Quixtar's Official Facts Site (http://www.quixtarfacts.com/)
- Quixtar Blog - One man's perceptions of Quixtar (http://www.quixtarblog.com/)
- Dateline NBC's story about Quixtar (http://msnbc.msn.com/id/4375477/)
- Quixtar's Response to Dateline Story (http://www.quixtarresponse.com/)
- Companies subvert search results to squelch criticism (http://www.ojr.org/ojr/stories/050601glaser/)